Center for American Progress offers plan to cut health costs without hurting seniors

WASHINGTON—With Congress and President Obama poised to enter yet another budget battle, the Center for American Progress released a new plan Wednesday that the organization says will stem the rising cost of health care without hurting seniors.

The plan would cut $385 billion from the federal budget over a decade through a series of proposals that target waste in the health care system and modernize Medicare. The proposals affect every constituent from medical suppliers to doctors and hospitals to patients.

The report urges the medical device industry to move away from pricing set by the government and towards competitive bidding for equipment such as hospital beds and walkers.

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Instead of paying doctors and hospitals for specific services, they should be reimbursed in ways that do not give them an incentive to perform unnecessary procedures. Tort reform is essential in transforming the psychology of doctors.

States, too, should be empowered to control their own health care costs – something Massachusetts and Oregon are already tackling. The center also seeks to change the structure of deductibles and co-pays so patients have an out-of-pocket limit based on their income.

“We believe these proposals are a ceiling, not a floor, in the discussions around health care,” said Neera Tanden, president and CEO of the Center for American Progress, a liberal public policy think tank, at a breakfast with reporters. “These savings are not easy to achieve. They are not an opening bid. They are what we believe should be a last bid.”

Tanden and health policy experts presented the proposals as an alternative to existing cost-cutting proposals that would privatize Medicare and turn the federal senior health insurance program into a voucher system, raise the age of eligibility to 67, shift the cost to seniors, and slash Medicaid and raise the cost of long-term care.

Tanden stressed that the proposal – and the dollar amount that it’s supposed to save—were controversial among many liberal-leaning universal health care advocates because the report seeks to transform entitlements that are often considered untouchable by many.

Tanden, who had served on Obama’s health reform team, and the heads of other liberal groups and union leaders met with the president on Tuesday on taxes and entitlements.

Dr. Ezekiel Emanuel, a senior fellow at the Center for American Progress and another former Obama health adviser who helped craft the health reform law, said the success of the Affordable Care Act, which seeks to expand the number of Americans with health insurance, will ultimately be judged on whether it also stems rapidly rising health care costs.

“These are legacy issues for [President Obama],” Emanuel said. “The real question for its success or failure is, ‘Can it control health care costs over the long term?’ . . . This really is the big kahuna for his legacy going forward.”